Yoshiharu Global Co. is undergoing a major reset, replacing top executives – including the company founder – and temporarily shutting down its restaurants as part of a sweeping overhaul aimed at restoring investor confidence.
The Buena Park-based ramen chain removed its founder and co-chief executive James Chae and Chief Financial Officer Ryan Cho as part of an executive shakeup that went into effect June 10 and effectively ends ties with the leadership that introduced the company to Wall Street.
Chae founded Yoshiharu in 2016, and Cho joined as CFO in May 2022. The two helped take the Buena Park-based chain public in 2022 when the stock soared to above split adjusted $60 each. At press time, shares traded around $12.10 and a $21 million market cap (Nasdaq: YOSH).
Director Takes Over
Ji-Won Kim, who was named co-CEO with Chae in May, is now the sole chief executive, the company announced June 12. Kim, managing director of investment firm BS1 Fund, counts over 20 years of experience in food service.
He was most recently the CEO of restaurant brand Macho Galbi since 2016.
“He is a recognized expert in brand development and operations, having successfully launched and established multiple brands in the market, including the Macho Galbi,” the chain said in a regulatory filing.
In his role as CEO of Macho Galbi, Kim has “led the implementation of franchise systems, menu and distribution management, and overall store operations, earning a strong reputation within the industry.”
Cho is being replaced by John Oh, who has been a certified public accountant for more than 20 years.
“Our new and accomplished executive team will enable Yoshiharu to fuel momentum and growth initiatives for our brand and shareholders,” Kim said in a June 12 statement. “With strong revenue and recently strengthened balance sheet, we believe this is an opportunity to refocus and further improve to top- and bottom-line growth and pursue additional strategic expansion in the U.S. and China,” he added.
The company also closed all 15 restaurant locations on June 13 for approximately three days “as the new management team conducts a review of store operations, performs an internal audit and updates the company’s accounting systems.”
Trouble with Nasdaq
The troubled ramen chain has also seen a shakeup among its board, with three members having resigned in the last five months.
It started in February with the resignation of independent director Jay Kim. According to a Feb. 13 filing, Kim was “a member of the audit committee of the board and was chair of the compensation committee of the board,” and that his resignation was not based on any “disagreement” with the company.
Sungjoon Chae, the chairman of investment entity BS1 Fund, later replaced Kim in March. BS1 provided Yoshiharu with $1.1 million to pay off and cancel a promissory note held by Crom Structured Opportunities Fund I in exchange for 440,000 shares of Class A common stock.
Two more board members, Yusil Yeo and Harinne Kim, in April said they would resign at Yoshiharu’s stockholder meeting on May 5. Abe Lim and Jae-Hyo Seo were then elected independent directors.
Shortly after, Chae resigned from the board on May 22, citing no disagreement upon his departure. The swift changes come after a troubled year for the company. Yoshiharu was on the verge of being delisted from Nasdaq until last March due to trouble with the chain’s total stockholders’ equity.
Yoshiharu faced a delisting as its equity fell below Nasdaq standards. After gaining additional capital commitments worth $1.9 million earlier this year, Yoshiharu reached compliance. The company had $4 million in cash on hand as of March 31.
The restaurant chain in May reported first quarter revenue jumped 25% to $3.5 million compared to a year ago while its loss widened to $1.4 million from $876,000 a year ago.